Market Round Up
Call MoneyThe overnight call money remained range-bound on Tuesday. The call money opened in the 9.10 to 9.25 per cent range on Monday compared to Monday's close of 8.90 to 9.00 per cent. According to Securities Trading Corporation of India (STCI), the call money opened in the region of 9.10 to 9.25 and remained static in the morning session. In the afternoon session it eased a little to close around 9.00 to 9.10 per cent. Most deals were struck in the region of 9.00 to 9.10 per cent. Some stray deals were also done at 9.35 per cent. "Much demand was not seen in the market as most borrowers especially banks went in for refinance," said a STCI dealer. According to dealers, the call market will remain steady for the next fortnight. The STCI lent funds to the tune of Rs 500 crore at the weighted average of 9.10 per cent. FORECAST: Call rate to open in the range of 9.00-9.25 per cent on Wednesday. Spot Dollar The rupee came under pressure on the back of dollar demand from
corporates. SBI sold spot dollars towards the end of the day. The rupee opened the day at 39.80/85 to the greenback, weaker compared with Monday's close at Rs 39.81. "There was good corporate demand for dollars," a dealer said. Panic-buying by corporates and nervous covering by banks on behalf of corporates pushed the rupee to Rs 39.86/90. State Bank, however, sold spot dollars in later-day trades. Dealers said that State Bank's sale of dollars may have been under the RBI's orders. State Bank's dollars sales at around Rs 39.86/90 in late-afternoon trades helped the rupee gain ground. The rupee quoted at Rs 39.89/89 towards the day's close.The greenback's high for the day was 39.91/94 while its low was 39.80/85, the same as its opening quote. The central bank fixed its reference rate for the dollar at Rs 39.89 compared with the earlier Rs 39.82. FORECAST: Rupee set to breach 40. Forward Premiums The Reserve Bank of India continued to intervene in July maturities by conducting buy/sellswaps as forwards continued to feel the heat. Dealers said many corporates were covering their foreign-currency loan exposures. Forwards moved by both for near- and long-term maturities. January dollars finished the day at at a premium of 25/30 paise over the previous close at 26/28 paise. February closed at 76/77 paise, weaker than Monday's close at 69/71 paise. March premiums closed at 111/116 paise (105/107 paise) while April quoted at 146/151 paise (135/140 paise). The Reserve Bank did buy/sell swaps for June and July maturities, but this did not have any impact. June dollars closed at 192/199 paise while July closed at 215/225 paise compared with its previous close at 22/227 paise. The six-month annualised forward cover finished the day at 10.50 per cent, slightly stronger than its Monday's close at 10.22 paise. FORECAST: Forwards to go slightly weaker on Wednesday. Gilts The wholesale debt market segment of the National Stock Exchange remained dull on Tuesday. "Call rates
remained more or less stable during the day at 9.25 per cent. It however closed lower at 9 per cent", said a dealer at a private sector bank. "The high call rates turned the market into a sellers market during the day", said the dealer. The wholesale debt market segment witnessed trades worth Rs 213.76 crore. The most actively-traded securities during the day included the 11.75 per cent 2001 government loan which was traded for Rs 35 crore and the 11.50 per cent 2006 government loan which was traded for Rs 15 crore at a weighted yield of 11.27 per cent. Repo trades worth Rs 70 crore were transacted during the day. The total value of debentures traded amounted to Rs 4.52 crore. FORECAST: Prices likely to fall as calls remain high.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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